This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Depending on your financial circumstances, you might have a lot of paperwork to get in order before April 15. (3/19 Update: The IRS has extended the filing deadline to May 17.) If you feel like you just need more time, it is possible to file for an extension on your federal tax return.
But there are considerations to keep in mind. Most important, filing for an extension on your return does not mean you have more time to pay the taxes you owe. That money is still due to the government on the regular due date, and you may incur penalties if the payment is late.
Here’s what you need to know to file a tax extension for tax year 2020.
What Is a Tax Extension?
A tax extension extends the deadline for filing your federal tax return by six months, making the new due date Oct. 15. All you have to do to get an extension is file IRS Form 4868 by April 15.
You can file the form electronically or on paper, and you won’t be asked to provide the reason you need the extension. Once the form is filed, your extension is automatically applied—the IRS will not contact you unless your request has, for some reason, been denied.
Again, it’s important to note that a tax extension does not grant a filer extra time to pay any taxes that might be owed to the IRS. If you can’t afford to pay your full tax bill, you should pay as much as you can and then contact the IRS at 800-829-1040 to discuss payment options.
The IRS notes that in some cases, the agency may be able to waive penalties, but not interest charges, which accrue on unpaid tax bills.
Why File a Tax Extension?
Given how much many of us dread Tax Day, you might be wondering, “Why not file a tax extension?” But even with an extra six months to get things together, eventually, the paperwork has to get sent in … and the money is still due on time. So procrastinating for procrastination’s sake may have diminishing returns.
But there are some reasons you might really benefit from a tax extension, such as:
• Needing extra time to track down lost or unsent tax documents, especially if you’re dealing with an extenuating circumstance (for instance, the closure of a place of employment shortly before tax documents were due to be issued)
• A major unplanned life event that interrupts your plans and makes it hard to get things together on time
• General life busyness that led to the deadline sneaking up on you
How to File for a Tax Extension
If you’ve decided that filing for a tax extension is the right move for you, there are a variety of ways to go about it.
First, you can simply download and print Form 4868 from the IRS website, fill it out, and mail it in, along with a check for estimated income taxes owed. The document itself includes information about where to send the document, depending on where you live.
If you’re filing electronically with a tax preparation software product or using the services of a professional accountant, they can help you file for an extension using their system.
Finally, if you use the IRS’s electronic payment system, you don’t need to file Form 4868 to request an extension. According to the form itself, “The IRS will automatically process an extension of time to file when you pay part or all of your estimated income tax electronically.” This applies to both online and telephone payments.
Can I File for a Tax Extension If I Owe Money?
Yes, you can still file for a tax return extension if you owe the government money—but the money itself is still due on the original due date.
Unfortunately, there’s no way to file for an extension of taxes owed. Rather, you should pay as much as you can of your estimated taxes when you file for the extension on the return, and then contact the IRS directly to learn about your options for complete repayment.
How to Know If You Owe Taxes
You may be wondering whether or not you owe taxes to the government at all—and if so, how to find out how much. While self-employed individuals must estimate their taxes and pay on a quarterly basis, those who file using W-2 wage reports may not often do this kind of taxation math.
The good news is, there are several easy ways to find out if you owe Uncle Sam. For one thing, you may receive a notice in the mail directly from the IRS, but be sure to look closely to ensure it’s official correspondence and not a note from a scammer. The IRS will never email, text, or reach out to individuals via social media.
The IRS has also set up an online tax account system that allows you to see how much you owe in taxes simply by logging in. This user profile also allows you to pay any owed taxes directly and takes only a few minutes to set up.
Finally, you can always call the IRS at 800-829-1040 to confirm any amount of back taxes you might owe.
Filing for a tax extension isn’t difficult, it turns out—and indeed, many tax time to-dos aren’t actually that hard. It’s all about getting the knowledge you need to get things done right the first time. (And, OK, maybe a bit of Virgo-esque organization.)
That’s why SoFi put together a comprehensive resource portal for all things Tax Season 2021, from understanding how your student loans might affect your taxes to figuring out which of your retirement contributions are tax-deductible.
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